Rwanda continues to strengthen its tax administration through reforms that promote compliance, fairness, and financial discipline. The latest Tax Procedures Law (Law N°020/2023), which repealed the previous 2019 legislation, introduces significant updates on administrative fines, interests, late payments, and audit recovery procedures.
For business owners, accountants, and finance teams, understanding these changes is crucial to maintaining compliance with the Rwanda Revenue Authority (RRA) and avoiding costly penalties.
Late Payment Interests: A Cascaded Structure
- Under Article 80, any taxpayer who fails to pay tax on time will incur late payment interest calculated monthly as follows:
0.5% if the delay is up to 6 months
1% if the delay is between 6–12 months
1.5% if the delay exceeds 12 months
Interest is non-compounding and calculated monthly.
It starts accruing the day after the due date and continues until full payment.
The total interest cannot exceed 100% of the principal tax owed.
Key insights:
💡 Tip from ALSM: Avoid last-minute filings — early payment ensures better cash flow control and compliance confidence.
Administrative Fines for Late Declarations or Payments
| Delay Period | Fine (% of Due Tax) |
|---|---|
| ≤ 30 days | 20% |
| 31–60 days | 40% |
| > 60 days | 60% |
Fixed Administrative Fines for Wrongful Acts
| Category | Fine (RWF) |
|---|---|
| Small taxpayer (FRW 2M–20M turnover) | 50,000 |
| Public institution or NGO | 300,000 |
| Large taxpayer | 500,000 |
VAT Compliance for Petroleum Dealers
The amended VAT regime now ensures VAT is collected at customs for petroleum products.
This means public institutions should not withhold VAT on fuel purchases, preventing double taxation and simplifying the supply chain.
ALSM’s VAT specialists help organizations apply the new VAT model correctly, especially for regulated industries like energy, telecom, and transport.
Enforcement and Recovery Procedures
If a taxpayer declares but does not pay within the required period:
RRA issues a Notice of Tax Assessment.
The taxpayer must pay within 7 days of receiving the notice.
If not, RRA sends a warning letter with a 15-day grace period.
Continued non-payment can lead to:
Seizure of property
Third-party collection (banks, debtors)
Bailiff-enforced recovery
💡 Proactive compliance prevents enforcement measures that can disrupt business operations and cash flow.
Why These Updates Matter for Businesses
The new law aims to:
✅ Encourage timely filing and payment
✅ Simplify VAT and audit procedures
✅ Reduce refund bottlenecks
✅ Promote accountability through progressive penalties
At ALSM Ltd, we interpret these reforms to help your business stay ahead from monthly VAT and PAYE filings to corporate income tax (CIT) planning and audit readiness.
How ALSM Ltd Can Help
As one of the leading accounting and auditing firms in Kigali, ALSM Ltd (formerly ALCPA) provides:
Tax Advisory & Compliance – VAT, PAYE, CIT, Excise, IQP filings
Accounting & Bookkeeping – Monthly and annual financial reporting
Auditing & Assurance – Statutory, internal, and donor audits
Outsourced CFO Services – Budgeting, financial strategy, and compliance
Financial Training & Coaching – Empowering your team with compliance skills
With certified experts (CPA Rwanda, ACCA UK, ICAI India, MIPA Australia), we bring global expertise with local insight to help your business grow with clarity, confidence, and compliance.
Sunny MATETI
Managing Partner
Chartered Accountant and Certified Public Accountant, I excel in managing intricate tasks, adhering to strict deadlines, and providing outstanding results. My expertise is grounded in a solid 17+ years of experience in auditing, accounting, tax, and advisory services.
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